Many people who rent instead of buying a home are in transitional periods in their lives. Rentals are perfect for those in need of flexibility--if you're straight out of college or embarking on an uncertain career move, rentals can provide a short-term commitment that satisfies most of your goals for a living space. There's also the added benefit of escaping responsibility from the sort of upkeep, nuts and bolts stuff that plagues homeowners--often renters aren't responsible for dealing with utilities or routine building maintenance.
There are many factors to take into consideration if you're debating between a rental or a more permanent real estate investment. How's your income? Renting can save you money in the long run, and skipping out on the often massive down payment required when you purchase a home means extra cash for other necessities. If you're income isn't reliable and you can't foresee a time in the future when it will be, paying rent is much more advisable than taking on a mortgage.
The real estate market in your area can also guide you to the right choice when determining whether to rent or buy. If there's a housing bubble, renters aren't affected--but if prices are on the up and up, renters don't make any money either. Check out the price stickers on houses for sale in your neighborhood, and keep abreast of local market trends. If prices are falling you can rent for a time, and then snag a house at a reduced rate later on. This can save you big bucks, and you won't be cursing yourself for jumping the gun on that spanish style three bedroom that might wind up costing in the long run.
The most important factor for your mortgage rates and one of the biggest indicators of your ability to someday own the house of your dreams is your credit score. Renting is one of the best ways to establish credit and resolve past mistakes. Take advantage of the many benefits renting offers to re-vamp your credit worthiness and make yourself a stunning loan candidate for mortgage companies.
Still, the grass isn't always greener for renters. Landlords are responsible for setting the rents, and that means your monthly bill can fluctuate up or down depending on the market, or (in the worst case scenario) the landlord's mood.
